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Private Equity Investors in the Middle East and North Africa (MENA)

by Louise Weller

  • 09 Nov 2011
  • PE

The Middle East and North Africa (MENA) region continues to attract a significant amount of attention as a result of the political and social unrest in many counties in the region.

Of the institutional investors tracked on Investor Intelligence that have stated a preference for MENA-based investments or have previously invested in funds that have exposure to the MENA region, almost a quarter (24%) are banks and investment banks, with government agencies representing a further 19% of LPs that have an interest in MENA. The international Finance Corporation (IFC), a US-based government agency, is known to have participated in ten private equity funds targeting MENA. This activity includes a USD 20 million commitment to Foursan Capital Partners I, which is a 2010-vintage fund that focuses on buyout opportunities in the MENA region.

Preqin’s Investor Intelligence database shows that of over half (57%) of investors with a preference for investments in MENA are located outside of the region: 29% are based in Europe, 21% in the US and 7% are located elsewhere in the world. Overseas Private Investment Corporation (OPIC), based in Washington DC, is known to have committed USD 150 million to KIPCO Opportunity Fund, which focuses on growth opportunities in the MENA region.

Despite some interest in MENA from LPs, investor appetite for the region does not compare as favourably to other regions within emerging markets. The latest Preqin Investor Outlook: Private Equity report shows that 2% of LPs that seek investments in emerging markets named the Middle East as the region currently presenting the best opportunities for investment. A further 14% named Africa as offering the most attractive opportunities within emerging markets in the current climate. In comparison, the highest proportion of investors, 40%, feel Asia is the most attractive region within emerging markets to invest. South America also remains attractive to investors, named by 28% of the LPs interviewed by Preqin.

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